Commentary on the economic , geopolitical and simply fascinating things going on. Served occasionally with a side of snark.

Saturday, January 25, 2014

Greece updates January 25 , 2014 - Finance Minister Yannis Stournaras is expected to face a barrage of questions from his eurozone counterparts at a summit in Brussels on Monday amid the slow implementation of reforms which has led troika officials to delay their scheduled return to Athens ....... Losing on cuts to to pensioners lump sums on retirement ( armed forces and emergency services for now ) will make the existing 500 million gap wider for the Greek Coalition Government...... Troika - slaves proposal , punitive fines ( scrambling for euros from wherever ) , banks issue ultimatum to fishing farming companies ( just kill another line of business , why don't you ? )

Council of State weighing appeals over cuts to pensioners' lump sums

In the wake of a leaked decision by the Council of State deeming wage cuts imposed on members of the armed forces and emergency services to be unconstitutional, the court is considering appeals by other groups of civil servants against reductions to the lump sums they receive on retirement, Kathimerini understands.
The appeals being weighed by the country’s highest administrative court have been lodged by civil servants but also by social security funds, according to sources.
The Finance Ministry is already scrambling to find some 500 million euros in revenue to return withheld wages to military and security services staff ahead of a formal court verdict on that case. Although judicial sources indicated last week that military and security services staff were being regarded as a special case that would not set a legal precedent, it appeared that more exemptions might be granted. This would oblige the government to find more revenue even as the troika pushes for spending cuts.
Unease in the government has been fueled by a ruling by the European Court of Human Rights according to which a retirement lump sum constitutes part of a pensioner’s personal wealth, as it has been generated through the latter’s contributions, and that any reduction to that sum is a violation of their rights.

Finance Minister Yannis Stournaras is expected to face a barrage of questions from his eurozone counterparts at a summit in Brussels on Monday amid the slow implementation of reforms which has led troika officials to delay their scheduled return to Athens.
Although Greece is not officially on the agenda of talks at the summit, it is expected that the progress of reforms will be discussed while Athens hopes that a date for the return of troika envoys could be set.
Government officials sent foreign auditors Greece’s proposals for dismantling barriers to competition over the weekend after the troika insisted that the implementation of dozens of recommendations in a report by the Organization for Economic Cooperation and Development (OECD) were key for the completion of a current review of Greece’s reform progress. The review must be completed before further rescue loans can be released.
Stournaras discussed the matter over the weekend with Prime Minister Antonis Samaras and Deputy Prime Minister Evangelos Venizelos in a bid to reach an agreement that satisfies the troika without fueling political tensions. Kathimerini understands that the government is prepared to adopt 80 percent of the recommendations while rejecting or offering alternatives for the rest.

Fish farm stocks suffered significant losses on the Greek bourse on Friday as banks are reported to have delivered an ultimatum to the companies in the sector, telling them to settle their debts or hand over their management.
The debts of listed pisciculture companies to local banks add up to 540 million euros, according to estimates, compelling bankers to take a joint approach toward the mounting debts and apply pressure on the sector.
On Friday the stock of Nirefs shed 7.23 percent, while Selonda Aquacultures contracted by 2.19 percent.

Dozens of accountants and tax advisers took to the streets of downtown Athens on Friday to protest the tax law that imposes exhaustive fines for errors and omissions in tax declarations, delays in Value Added Tax payments and other mistakes that could occur due to ‘human errors’.

Some 300 protesters marched in Athens and demanded that the finance ministry withdraws the law.

“They kill the small- and medium businesses,” and “they will close down every business with such exhaustive fines” the protesters said.

According to the law that started to be applied since 1.1.2014, heavy fines that are in no proportion to the value of the tax violation are being imposed driving to desperation businesses and tax payers.
A fine of 1,000 euro can be applied for even a day of delay in the payment of V.A.T. to tax office.
Some examples of another crazy Greek tax law:

- For false declaration of payroll tax, where a company had to pay to the tax office 4 euro per month, the fine imposed at the end of the year reaches the astronomical amount of 43,055.68 euro. then each violation (not payment) repeats each month before the fine doubles and quadruples in 5 years.

If I understand it right, 4 euro per month x 12 = 48 euro. The fine 2,500 euro x 12 months turns 30,000 euro at the end of the year, if the tax of 48 euro is not paid at the end of the year?

- For a delay of several days in VAT payment of 200 euro to the tax office, a company is fined with 2,500 euro.

- Non- submission of VAT return worth 2,000 euro (delay 25 days ) a fine of 1,000 euro will be imposed. the fine sums up to 2,000 euro if the violations is repeated for a second time within 5 years and up to 4,000 euro if the violation occurs for a third time. (source: capital.gr)

“When we make mistakes, we’re fined. But when they {the finance ministry] make so big mistakes that are continuously corrected with circulars, why do they pay nothing?” the president of accountants confederation POFEE, Avraam Panidis, said during a press conference on Thursday.

POFEE general secretary Nikolaos Kambanis said that when they asked for a meeting with the author of the fines provisions, they were told that the author had “passed away”. “These fines provisions have nothing to do with combating tax evasion. The only relation they have is with stupidity!.” Kambanis commented.

Tax Adviser Antonis Mouzakis stressed that the exorbitant fines will have only one result: “to increase the outstanding debts to the state from 63 billion euro to 70 billion and to give the final trip up to businesses in this country.”

Fridays protesters had a meeting with deputy finance minister Mavraganis who told them to submit their proposals in written form.

Fact is that the law was approved by coalition government Nea Dimokratia and PASOK during a voting at the parliament last year.

PS that’s the problem when lawmakers have no idea of the real world and vote laws just for the sake of the Troika and the country’s lenders. Oh! and in order to receive the next bailout installment.

There must have been a massive chemtrails attack recently otherwise I have no logical explanation for this “crazy idea” – to say it politely. According to a proposal tabled by the Center of Economic Research Planning (KEPE), an official advisory body to Greek Labor Ministry, minimum wage and unemployment allowances for Greek labor forces up to 24 years old should be abolished, the unemployed young Greeks should work for one year without salary and then migrate abroad.

In this idiocy-infused proposal, it is also recommended that after the work year, the unemployed youth should be exported to other countries. Possibly, incentives to Greek companies operating abroad should be offered in order to hire these Greeks, because “companies in Greece do not have the potential to recruit neither now nor in the near future,” according to the reasoning of the Center.

The proposal came from Ioannis Cholezas, economist and director KEPE which is the advisory body of the Greek government on issues related to economic development and labor market.
Youth unemployment is currently at 57.9 percent.

I would add another proposal: the measure to motivate companies to hire labor forces should be extended to all ages and all sectors, incl the public sector. I. Cholezas should make the difference and start working without salary. Also his children, his wife, his relatives and friends. Only then Greece can experience real development and growth and happy labor forces UPDATE Speaking to Skai TV Ioannis Cholezas tried to explain his proposal that shocked not only the Greek society and the political world but also PM Samaras’ lawmakers.
Cholezas said that work without salary would solve the problem of youth unemployment if the minimum wage defined by labor law was abolished and it was up to employer and employee to arrange the work payment:

“Nowadays, youth without work experience have two options: either to work in the black market [without insurance and social security] or not at all, because many businesses cannot pay them. If the minimum wage [restriction] is abolished, employer and employee can make their own arrangements and it will be up to the employee to decide to work for a year without salary in order to gain working experience.”

“These are my own personal views,” Cholezas added trying to escape the sharp criticism and avoid the responsibility as director of KEPE.

Prokopis Pavlopoulos, Nea Dimokratia MP and lawyer, told him that his proposal was “against the Greek constitution in particular and the EU guidelines in general as both set a minimum of of preconditions for labor. “Did you consult with any lawyer before making such a proposal?” Pavlopoulos asked Cholezas who replied with …silence.

Also present at the tv panel was SYRIZA MP Dimitris Papadimoulis who warned that “abolishing laws on minimum wage would bring the labor market into collapse” and thus in times of an already suffering labor market.

Possibility is high, that we will never hear from Cholezas again… who will keep earning his salary from hungry tax payers’ money.
PS if you thought ‘neo-liberalism’ was bad, wait to see its further development… at least slaves used to get a meal and a bed to sleep.